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State and Local Employment Still Lags

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By Michael Rainey

July 9, 2018

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State and local governments have fewer employees than they did before the recession, Bloomberg reports.

Rising steadily since it bottomed out in 2014, employment at local governments is just .01 percent below where it was at the beginning of the recession at the end of 2007. But employment at state governments is .72 percent lower than it was at that time, and has been falling for more than a year following a resurgence between 2014 and 2016.

The slowdown in state government hiring is politically driven, according to Natalie Cohen of Wells Fargo. "States have tightened their belt consistently and they continue to do that. We have a lot more conservative ’no tax, don’t spend’ governors," Cohen told Bloomberg. The steady increase in local employment, on the other hand, is driven largely by hiring at local school districts.

There are currently 14.5 million local employees in the U.S., and 5.1 million state employees. Cohen said that she expects state-level hiring to pick up in the coming months, as new taxes on marijuana, online sales and sports betting provide extra revenues.